Your customers are the lifeblood of your business but just how well do you know them? If you know only their email addresses, it's safe to say you could know them better. Admittedly you can contact them -- but will they want to hear what you have to say?

The more you know about your customers the better chance you have of pitching products and services to them that they actually want to buy. Your customer database is the best marketing tool you have (you do have one, right?) to track your customers interests. It's your key small business marketing asset -- but only if you treat it right.

Along with the name and email address of everyone you've sold to, your customer database should also include what they purchased  and when. You can then use this information to target your advertising and marketing strategies.

Selling to an existing customer is far easier (and cheaper) than finding a new one. Its also a fair bet that someone who bought a printer from you will need replacement ink cartridges and photo paper within a few months of buying it and throughout the life of the printer.

If you know who's buying what, you can target them with highly relevant offers.

Collecting Customer Data

When you sell online you are at a distinct advantage over brick-and-mortar stores because you have to collect certain data to complete each transaction. You need the customer's email address to confirm the sale plus their name and shipping address and, of course, youll have a record of what they have bought. You dont even have to go to the expense of gathering the data -- your customers do the data entry for you.

However, you need to make sure that your shopping cart software records this data and that you can access it. You should also ensure that, as part of the checkout process, you offer customers the opportunity to sign up for your email list so you can legitimately include them in future mailings.

If you have a brick-and-mortar store then gathering the data is a bit more difficult because you generally dont need it to complete the sale. However, you can offer customers incentives in exchange for their information. For example, you might offer a discount for being a frequent customer or a weekly prize draw. Be creative in your approach and accept that some customers just wont give you the information.

Leverage the Data

Of course, a customer database full of information is only valuable if you use it to your best advantage. Instead of sending out lots of general email messages or direct mail to everyone on your list, consider sending targeted messages.

Look at the products your customers have purchased and consider what other merchandise you sell that might complement the items those customers bought. Send targeted email showcasing the other products they may be interested in. Following our printer-purchase example, you might send an email highlighting special pricing on replacement ink cartridges.

Protect Your Database

Your customer database is a valuable business asset -- protect it! Make sure to back up your data regularly and store a copy offsite or somewhere other than where you keep the original. If the server crashes or a natural disaster strikes, you wont lose it.

As your business grows so too will your database. Over time you'll find that it contains out-of-date and inaccurate entries. Customers may change their email addresses, and duplicate entries can appear if your software isnt smart enough to keep that from happening.

If your business has multiple databases with duplicate entries -- perhaps a general email list that anyone can sign up for and a separate database of customers who have made purchases -- names that appear in both databases will receive multiple emails. This annoys people and, despite your best intentions, you can lose customers because of it.

Avoid this mistake by regularly comparing your lists and removing any duplicate entries so that you dont burden customers with multiple emails. Depending on the size of your lists and the format they're stored in, you might be able to do it manually or you may require a specialist solution.

Customer Database Privacy Policies

If you sell your business, your customer database has value to a potential buyer, as it gives them a way to know who the customers are, what products they have purchased in the past and a means to contact them.

However, if you sell online you may need to revisit your websites privacy statement (and amend it) to make sure that it allows you to transfer this information to someone who buys your business. Otherwise you may have a valuable asset that you cant do anything with.

A quality customer database isnt something you can build overnight. It takes time. However with care and attention, you can develop it into a valuable marketing tool and a key business asset.

Helen Bradley is a respected international journalist writing regularly for small business and computer publications in the USA, Canada, South Africa, UK and Australia. You can learn more about her at her Web site, HelenBradley.com

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